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Data shows that institutions have heavily accumulated Bitcoins between $ 12,000 and $ 15,000, and according to analysts at Whalemap, this is a positive trend as institutions and whales typically accumulate assets with a strategy of longer term investment in mind.
The fact that bigger hands are accumulating BTC instead of retail investors also explains the somewhat suppressed general interest in Bitcoin, as Cointelegraph previously reported.. Various metrics, including Google Trends, have shown poor overall demand for BTC despite its parabolic rally in recent months.
Institutional “FOMO” Makes Current BTC Rally Stronger Than Previous Cycles
Whalemap analysts described the recent spike in demand for Bitcoin from whales as “institutional FOMO.”
FOMO, short for “fear of missing out,” refers to a trend in which investors increasingly buy an asset fearing it will continually surge. Referring to a graph showing clusters of whales and entries into whale portfolios, analysts said:
“These are the levels and this is what institutional fomo looks like.”
Clusters of whales emerge when whale addresses – addresses containing more than 10,000 BTC – buy Bitcoin and don’t move it for extended periods of time.
This shows that the whales plan to keep their latest purchases of BTC in their personal wallet. Whalemap analysts said:
“The bubbles indicate the prices at which the whales bought the BTC they are currently holding.”
The aggressive buildup of Bitcoin from whales has likely occurred based on two key trends that have been present in the cryptocurrency market since October.
First, there has been a sharp reduction in short-term sell-offs throughout the recent rally. In previous rallies, when BTC erupted, more than $ 100 million worth of contracts were liquidated on the major exchanges. This shows that the rally was not a short push but a real phase of accumulation.
Second, the spot market dominated the derivatives market, not the other way around. When the price of BTC increased, the funding rate of BTC rarely exceeded the average of 0.01%.
The low financing rate shows that the futures market has not been in the majority for a long time, showing that demand came from elsewhere.
This bull market will be more stable than in 2017
Along with the increased involvement of whales and institutions, the overall volume of trade increased dramatically during the recent rally.
Data from Santiment, a chain market analysis company, also shows Bitcoin volume of around $ 31 billion, which is much higher than January 6, 2018. At the time, the price of BTC also hovered around $ 16,350.
Santiment analysts found that the current rally had more volume behind it than the 2017 rally. Analysts wrote:
“With Bitcoin hitting $ 16,350 on CoinbasePro an hour ago, we are now at the highest price point in 34 months (January 6, 2018). The avg. daily trading volume this week is $ 31.0 billion compared to $ 18.5 billion then. “
As Cointelegraph reported, the short-term roadblock for Bitcoin remains whether the whales will sell at the resistance of $ 17,000. Some analysts say there is no clear resistance before the $ 18,500- $ 20,000 range, which means that an all-time high could be much closer than most people think.
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